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Shares of YES Bank slumped as much as 12.5 per cent on Wednesday after Moody’s Investors Service downgraded the lender’s ratings to non-investment grade and changed the outlook to negative from stable.
YES Bank shares plunged 12.5 per cent to Rs 160.15 on the BSE. On the NSE, the stock slumped 12.23 per cent to Rs 160.30.
Moody’s Investors Service had on Tuesday downgraded YES Bank’s ratings to non-investment grade and changed the outlook to negative from stable on the back of various resignations from the board. The resignations, when seen in conjunction with RBI’s September directive to restrict the term of the bank’s MD and CEO Rana Kapoor, till January 31, 2019, have raised concerns over corporate governance, it said.
“Although the bank’s reported credit fundamentals remain stable, the developments surrounding the transition in leadership as well as the governance issues are credit negative because they complicate management’s effective implementation of the bank’s long-term strategy,” Moody’s said.
Furthermore, these developments could constrain the bank’s ability to raise new capital, it added.
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